The Canadian pension fund manager, CPP Investment Board (CPPIB) becomes the third largest stakeholder in ReNew Power where Goldman Sachs holds the majority share. It is acquiring a 14-15% stake for $350 million (Rs 2,250 crore).
CPPIB is acquiring the stake in two transactions. It has made a primary investment of about $200 million through compulsorily convertible preference shares.
These will be converted into equity whenever ReNew goes for an initial public offering. In addition, it will buy 6.33% of ReNew’s shares from Asian Development Bank for about $150 million. This transaction, which values the company at $2.37 billion, will give ADB a handsome return for its investment of $50 million made three years ago.
CPPIB’s deal is the biggest investment in a renewable energy company in India this year. This surpasses a $200 million investment, again in ReNew, by Japan’s largest utility JERA Co in February for a 10% stake. The JERA investment had valued ReNew at $2 billion.
CPPIB invests the excess funds of the Canada Pension Plan Board. It has been investing in India since 2010, in sectors such as infrastructure, real estate and financial services.